RBI’s Monetary Policy Committee members agree to focus on inflation
The six-member Monetary Policy Committee of the Reserve Bank of India (RBI) unanimously decided to maintain the status quo on the repo rate at 4 per cent during its meeting held between April 6-8, 2022, also in agreeing to the fact that integrated Said that inflationary pressures needed to be reignited.
According to the minutes of the committee meeting released by the central bank today, all members, from Governor Shaktikanta Das and Deputy Governor Michael Patra to Executive Director Mridul Sagar and economist Ashima Goyal, expressed concern over rising prices, citing it as a key focus area. marked. ,
Due to rising prices, RBI has raised the retail inflation target for the current fiscal to 5.7 per cent based on rising global prices amid prevailing geopolitical tensions, even as prices of cereals and pulses soften. are supposed to. On the prospect of a good winter harvest.
Let us look at some of the top quotes from members of the Monetary Policy Committee on inflation during the deliberations in the meeting.
RBI Governor Shaktikanta Das,
While risks to domestic growth demand continued liberal monetary policy, inflationary pressures require monetary policy action. The circumstances require stabilizing inflation expectations in order to prioritize inflation and protect macroeconomic and financial stability, while taking into account the ongoing recovery of growth.
RBI Deputy Governor Michael Patra,
Supply disruptions, rising commodity prices and ensuing financial market turmoil no longer sway fears about the size of future inflation – the worst fears are already coming to the fore. Instead they darken the outlook for development. Macroeconomic conditions are toughest for developing countries, even as rising prices are accompanied by severe shortages of essential commodities. On the one hand, the cost of foreign currency credit for emerging market economies is rising and, on the other, increasing exchange rates are forcing them to deplete currency reserves. Higher commodity prices could also complicate the situation for governments trying to cushion the impact of the pandemic by subsidizing food and energy to households.
RBI Executive Director Mridul Saggar,
Contingency risk has given shape to calls for a change in policy. We are witnessing a deep conflict. While it is not clear how long this could last, it appears that even on its de-escalation, supply chain disruptions and high prices of energy, agricultural products and minerals and metals could last for at least a year. .
Ashima Goyal,
Ukraine war has lasted more than a month, uncertainties continue, oil prices are volatile, supply disruptions will drive inflation but also reduce demand; The continued high impact of COVID-19 in major countries will have similar effects. Inflation The general domestic response to supply shocks is to reduce consumption. In addition, the reduced wage share will also reduce their demand.
Shashank Bhide,
Even before the Russo-Ukraine War, the monetary policy response to rising inflationary pressures in advanced countries began with an increase in policy rates and measures to strengthen the easing liquidity position created to manage the adverse impact of the COVID pandemic. Was. Monetary policy tightening is expected in developed countries to reduce inflation rates, but it will also have a significant impact on trade and investment flows to developing countries.